ORDER
J.K. Mehra, J. (Member)
1. This is an appeal arising out of the order of the State Consumer Disputes Redressal Commission, Tamil Nadu dated 23rd July, 1995 in O.P. No. 138 of 1994.
2. The contention of the Appellant is that the Appellant is a firm carrying on business of iron and steel apart from enjoying over-draft facilities with the Respondent Bank since 1986. The Bank was also extending facilities of temporary over-draft from time to time and this facility of temporary overdraft at times went as high as Rs. 50 lakhs. While the facilities were being enjoyed by the Appellant and Respondent Bank on 5th June, 1992, without notice to the Appellant, locked the premises of the firm. It is alleged by the Appellant that it all happened due to the change of the Manager. The Appellant alleges that as a consequence of the above action, the reputation of the Appellant suffered substantial damage and for this action the Appellant claimed a sum of Rs. 15 lakhs by way of compensation. The grant of cash, credit facilities and over draft was not disputed though the extent of Rs. 50 lakhs was in dispute. This was being granted subject to the Appellant maintaining adequate stocks to cover the dues and was required to submit its periodic stock-statements as the Appellant was overdrawing his account leading to a huge balance outstanding. The Respondent insisted for adequate security and called upon the Appellant to regularise the account. The Respondent further points out that there was a overdue balance of around Rs. 40 lakhs, but when the surprise inspection by the officers of the Bank was conducted, they found stocks were hardly worth Rs. 15 lakhs. Therefore, it was, with a view to secure the bank’s interests that the bank who was the hypothikee of all movable stocks, converted the said hypothecation into pledge by exercising its rights in terms of hypothecation agreement. The relevant clauses of the said hypothecation agreement reads as under:
“Clause 9: The Bank and any of its officers and other employees shall be entitled in default of payment of the moneys hereby secured or in case of any contingency or emergency arising which in the opinion of the Bank would make it necessary or expedient for the Bank to take possession of the hypothecated goods to enter upon any premises where the hypothecated goods shall be lying and to take possession of the hypothecated goods or any part thereof and for the purpose of taking possession to break upon any outer or other doors of any premises where the goods to be taken possession of may be lying and to sell either together or in lots and either by public auction or private contract or otherwise to dispose of or deal with all or any part of the hypothecated goods with liberty to buy in at any sale by auction and to rescind or vary any contract for sale without being answerable for any loss or diminution in price and without being bound to exercise of any of the powers hereby conferred or being liable for any loss occasioned by the exercise of any such power and to give effectual receipts and discharges for the purpose money and to do all such other acts and things for completing the sale as the Bank shall think proper. The Borrowers shall not raise any objection to the regularity of any sale or other disposition made by the Bank nor shall hold the Bank responsible for any loss that may without the Bank’s negligence arise from any act or default on the part of any broker or auctioner employed by the bank for the purpose of the sale or other disposition.”
Clause 12: If the Bank shall take possession of the hypothecated goods or any other part thereof, whether under Clause 9 hereof or otherwise howsoever, the Bank shall be at liberty either to keep the goods so taken possession of in the premises wherein they may be lying at the time possession thereof is taken by the Bank and to affix the Bank’s locks to such premises or to remove the goods to any other premises. Notwithstanding anything to the contrary in Section 152 of the Indian Contract Act, the Bank shall not be responsible for any loss or deterioration of, or damage to, the hypothecated goods taken possession of by the Bank whether by theft, fire, rain, flood, earthquake, lightening or any other cause whatsoever. It is also noticed that the Bank had been insisting on repayment of its dues and had already filed a suit for the recovery of Rs. 68,55,020/- before the High Court of Tamil Nadu at Madras.
3. In view of the aforesaid conditions of the agreement to which Appellant was a party and in view of huge outstanding which remained uncleared the action of the bank in taking possession of the securities to protect its interest cannot be assailed.
4. In the light of the above facts, we find absolutely no infirmity in the order of the State Commission and the complaint of the Appellant was rightly rejected by the State Commission. The appeal is accordingly dismissed with costs which are assessed at Rs. 5,000/-.